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California Is Surprise Winner in Bid to Run Los Alamos

In a surprise finish to months of battle, the University of California prevailed yesterday in its bid to run Los Alamos National Laboratory, the storied weapons research center in the mountains of New Mexico and the birthplace of the atomic bomb.

The university teamed with the Bechtel Corporation, the world's largest construction and engineering company, and two other industrial giants to win the contract. It is the first time the laboratory's management has been put up for bidding. Federal officials announced the winner in Washington yesterday.

Most analysts expected that the contract would be wrenched away from the University of California, which has run Los Alamos since it opened more than 62 years ago, by a rival team headed by Lockheed Martin, the world's largest arms maker, and the University of Texas. Both Lockheed and the University of Texas have close ties to the White House.

But the University of California overcame not only whatever advantages its competitors offered but also the government's longstanding discontent with its management.

"It's a surprise," said Hugh Gusterson, an anthropologist at the Massachusetts Institute of Technology who studies the nation's nuclear arms laboratories. "I thought Lockheed had an edge simply because of the troubles Los Alamos has had. You'd expect people to try a new manager."

The Department of Energy, which owns Los Alamos, called for the management of the laboratory to be put up for competitive bid in April 2003, after years of spy scandals, security lapses, safety upsets and financial blows.

Federal officials stressed that the new management team -- with the university serving as just one voice among three industrial partners -- is expected to bring significant improvements to the lab's safety, security and operations.

"This is a new contract, with a new team, marking a new approach to the management of Los Alamos," Secretary of Energy Samuel W. Bodman told reporters yesterday in Washington. "It is not a continuation of the previous contract."

The team, named Los Alamos National Security, is to begin running Los Alamos in June.

Richard Sterling, an engineer at the University of California, Berkeley, who in newspaper articles had criticized Lockheed Martin, said he was relieved.

"It's pretty sad when one is forced to root for Bechtel," Mr. Sterling said. "I'm surprised but glad. The lesser of two evils has won."

It is the first time a corporation has signed up to help manage the laboratory, and it portends marked changes in the research center's traditional academic atmosphere.

The contract announcement, originally set for Dec. 1, was delayed 20 days, and experts speculated that a decision had been made, but that political forces in Washington worked to overturn it. Federal officials insisted yesterday that the delays were procedural and that the California team had won on its management plan.

"All four parents are going to bring their best attributes," Tom D'Agostino, an Energy Department official who picked the winner after reviewing recommendations from a board of experts, said at the news conference. "We're quite confident."

However, the decision could prove controversial at the lab for many reasons, including lingering resentment toward the university.

"You can't underestimate the residual anger over the events of the last year," Doug Roberts, a computer scientist and the founder of a popular blog highly critical of the laboratory's management, said in an interview. "It won't be pretty."

Complicating things further, the winning team's selection of the new director for Los Alamos is Michael R. Anastasio, who led the group that put together the winning bid and who is director of the Lawrence Livermore National Laboratory in California, an archrival.

"If the Soviets were the competition, Livermore was the enemy," said Dr. Gusterson of M.I.T. "I imagine a lot of people will have mixed feelings for that reason."

Dr. Gusterson stressed, however, that Dr. Anastasio has a reputation for managing by consensus, unlike G. Peter Nanos, the former director of Los Alamos who resigned in May.

The winning team also includes BWX Technologies, a large nuclear management firm, and the Washington Group International, a longtime Energy Department contractor.

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Now the teammates will jointly run a fortified, forested mile-high plateau where 14,000 people work in a scientific wonderland, a place that cherishes its mystique as much as its culture of atomic secrecy.

"The big mystery is why U.C. wanted the contract," Dr. Gusterson said. "In the last 15 years, it's brought them nothing but grief."

The going was bumpy from the start. In 1943, when J. Robert Oppenheimer set up a secret laboratory in New Mexico to make the world's first atom bomb, he took along the University of California.

Eager to avoid rigid military rules and keep civilians in control, Dr. Oppenheimer, a physics professor at Berkeley, asked his own institution to run the project. Historians say the university did so out of a sense of wartime duty. It had little or no idea what the secret research was about and received little in the bargain: a paltry management fee and much grief from pacifist students and faculty members.

In contrast, the laboratory relished the prestige. Would-be recruits were reminded of the university's many Nobel laureates and the academic freedom lab scientists enjoyed, despite the armed guards, security cameras and barbed wire.

The university's management style tended to be loose, hands off and academic. In 1995, the University of Texas asked to be allowed to bid for the management contract. Federal officials said no. Problems grew.

In 1999 and 2000, the government accused a Los Alamos scientist, Wen Ho Lee, of 59 counts of mishandling nuclear secrets and jailed him for nine months. The laboratory provided testimony for the prosecution. Even so, all charges but one were dropped.

The pressure for new leadership grew during the Bush administration. In late 2002, the Energy Department said the continuing woes reflected "a systematic management failure," and in April 2003, the department announced a contract competition.

Things seemed to spiral out of control. In July 2004, the laboratory's director, Dr. Nanos, shut down Los Alamos after two computer disks with secret information were reported missing and an intern working with a laser suffered an eye injury. Dr. Nanos blamed a culture of arrogance that had produced an organization full of "cowboys."

The security alarm turned out to be false: the disks, it turned out, never existed. Still, Dr. Nanos kept many laboratory areas closed for nearly seven months.

All the teams that bid on the management contract vowed to increase supervision at the laboratory. Sweetening the deal, the Energy Department raised the annual management fee for Los Alamos to roughly $80 million, from about $8 million.

Lockheed Martin had relevant experience. Since 1993, it had managed the government's Sandia National Laboratories in Albuquerque, a nuclear arms center where C. Paul Robinson served as director until quitting his job in April to lead the corporation's bid for Los Alamos.

This summer and fall, a wave of jitters swept the lab, with an increase in retirements and officials fearing a mass exodus. Employees worried that benefits under the new management would never match the University of California's.

In talks and appearances, Texas and Lockheed officials radiated a self-assurance that implied that the contract was theirs. On Dec. 8, Michael F. Camardo, a senior Lockheed official, told a defense industry conference that LosAlamos would provide up to $79 million a year in fees with no investment and no risk.

Critics saw Lockheed's probable arrival as a political event meant to emphasize nuclear arms and an aggressive foreign policy.

In an interview several weeks ago, Dr. Gusterson of M.I.T. disagreed, saying that, no matter who won the competition, changes in national priorities were likely to re-emphasize work on nuclear arms.

Los Alamos, he said, is "the only place where you can handle highly toxic materials and make radioactive bomb components. So whoever gets the contract is going to become more manufacturing oriented. There are structural pressures apart from the management issues."

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A version of this article appears in print on December 22, 2005, on Page A00028 of the National edition with the headline: California Is Surprise Winner in Bid to Run Los Alamos. Order Reprints|Today's Paper|Subscribe